2019 Q1 Colliers St Louis Industrial Report

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The St. Louis industrial market showed continued growth in the first quarter of 2019. Vacancy rates dropped, asking rental rates increased and construction remained at levels well above average. All of these factors led to positive absorption for the quarter. The economy also made positive gains, with a decline in unemployment and an increase in Real GDP. Developers continue to see a demand for new modern bulk space. In response, new industrial parks are under construction. Despite this good news, some industry experts believe the deal pipeline is slowing. This will result in an over-supply of inventory with new speculative space remaining vacant for a longer period of time especially older, non-tax-abated properties.  

The St. Louis market has seen year-end absorption of over 1 million square feet (MSF) every year since 2012. The first quarter ended with 442,819 square feet (SF) of positive absorption which resulted in lower vacancy rates. The overall vacancy rate for the St. Louis market is 6.18%, the lowest rate since 2006. The five-year average vacancy rate is 6.5% and the market high was 10.2% in 2011. Sustained positive absorption over the last seven years is placing upward pressure on rental rates. The average direct asking rental rate for the market rose to $4.57 per square foot (PSF), a 5% increase from one year ago and nearly 9% higher than the five-year average of $4.19 PSF. Current numbers are in line with pre-recession levels in 2006 and 2007. 

Q1 2019 Industrial

2019 Q1 Colliers St Louis Industrial Report

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